Nigeria, Africa’s biggest oil exporter with the largest natural gas reserves on the continent, accounts for about half of West Africa’s population. Oil price volatility, particularly in the wake of the Covid-19 crisis, influences Nigeria’s growth performance.
The country faces a range of developmental challenges, including the need to reduce economic dependence on oil, rebuild social infrastructure and develop strong and effective institutions with robust public financial management systems. Nonetheless, the country has made many improvements in the governance of its oil sector, bringing greater transparency and publishing credible and trusted data. Reports, policy briefs and other knowledge products published by the Nigeria Extractive Industries Transparency Initiative (NEITI) have been a catalyst for ongoing reforms and have helped the country to identify about USD 20 billion in recoverable revenues, and to recover approximately USD 3 billion into government coffers to date.
Nigeria was one of the first oil-producing developing countries to engage with the EITI, enacting the Nigeria EITI Act in 2007 and creating a law devoted to improving transparency, accountability and good governance through EITI implementation. In that year, more than three-quarters of the consolidated government revenue came from the upstream oil and gas industry. The country’s early adoption of the EITI has seen NEITI become a “one-stop shop” for information and accurate data across the extractive sector value chain. Previously, the industry was opaque, with little reliable public information on production levels, crude oil losses, government investment in the upstream projects or downstream information.
The EITI in Nigeria encountered some initial hurdles in publishing accurate and timely reports on key sector data, such as production, revenues and governance processes. Some reports were delayed by several years, meaning that those who could hold the state accountable for oil revenues – such as investors, companies, civil society organisations and the media – received data only several years after the reporting period.
With the help of the World Bank’s Extractives Global Programmatic Support Trust Fund, NEITI has now succeeded in producing its reports in a much more timely and efficient manner. Most recently, NEITI achieved a key milestone: publishing its oil and gas report for 2018 in March 2020, nine months ahead of the EITI’s reporting deadline. This is a first for Nigeria and an improvement in the effectiveness of its reporting under the EITI. NEITI hopes to publish its 2019 EITI Report even sooner, amplifying the impact of the reports and paving the way for publishing information through government and company systems, to make data even timelier.
In a signal of its strong progress, Nigeria was assessed as achieving “satisfactory progress” in implementing the EITI Standard. It is one of eight countries that achieved this assessment, among the EITI’s 53 member countries.